The informal sector which comprises the Small, Medium and Micro enterprises (SMEs) that accounts for over 70 percent of the country’s GDP is the worst hit segment of the economy which has been ambling through rugged times since the devastating Easter attacks and now the global virus that is taking its toll on the world economy.
The host of relief measures introduced by the Government to support particularly SME enterprises came as a lifeline for many small scale entrepreneurs who were already saddled with the burden of repaying loans amidst a slowing economy.
According to SME entrepreneurs and chambers and business organisations representing them, the nerve-wracking question is how big and how long it would take to pull-through the present crisis.
From a multinational to an enterprise in the village no sector has been spared by the debilitating effects of the global crisis which is said to record the lowest growth since the early 1990s.
Casual workers including carpenters, masons, plumbers, electricians, butchers, cobblers and those working in corner shops have been thrown from the frying pan into the fire with their dependents having to hit the sack on empty stomachs.
“I have had no work for the past week and I am unable to put food on the table and keep the family fires burning,” said Jude Pathirana, a father of three and a casual worker in Wattala.
Greengrocers, hawkers and street vendors in Pettah and elsewhere in the suburbs who lead a hand-to-mouth existence are unable to feed many hungry mouths at home.
SMEs that were able to keep the nose above water for some time, are on the brink of perishing with businesses coming to a virtual halt due to the partial lockdown of the country.
“We have voiced the concerns of small scale businessmen to the authorities for more relief measures that would provide a sigh of relief to small timers to tide over tough times,” Sri Lanka Chamber of Small and Medium Industries President Rohan de Silva said.
Employees of key sectors such as plantations, tourism and apparel face the risk of layoffs or delays in receiving salaries due to cancellation of orders and production being put on hold.
Joint Apparel Association Forum (JAAF) Secretary General Tuli Cooray said last week that the apparel sector is in for difficult times due to the cancellation of orders.
On the global front, the UK Government has taken steps to subsidise the wages of workers facing unemployment because of the coronavirus pandemic resulting in the closure of pubs and restaurants to try to contain the outbreak.
The Government will cover 80% of worker salaries for at least the next three months up to a maximum of £2,500 ($2,900) a month, which is more than the average income, according to reports.
A US Government report showed that 281,000 Americans filed for their first week of unemployment benefits last week — a sudden 33% jump over the week before and the largest percentage increase since 1992.
However, the silver lining for the global economy is the reports this week that China is trying to jump-start its huge economy without triggering a second wave of coronavirus cases.
The country where the pandemic began was almost completely shut down in late January as the number of coronavirus cases mounted.
Global stock markets surged early last week after weeks of losses according to reports. There was further financial turbulence on Tuesday when stock markets around the world climbed sharply higher, as investors grappled with the economic impact of the coronavirus.
In the US, the Dow Jones Industrial Average rose 11.4% - its biggest daily gain since 1933. The S&P 500 and London’s FTSE 100 enjoyed their best days since the 2008 financial crisis, rising more than 9%.
The increases follow weeks of losses driven by a global economic slowdown.